Direct from China: Eight ways to help your small business compete

China has long been the source of many consumer goods purchased in the United States.  But in recent years, manufacturers in China and neighboring countries began selling directly to shoppers through sites like AliExpress and eBay.   At first limited to cheesy trinkets and fashion accessories, the overseas marketplace is always expanding.   Businesses are reaching out to increasingly specialized consumer groups--most recently, in my own cubbyhole of witchy and Pagan wares.  If you're a merchant in a subcultural niche--whether it's Wicca, Steampunk, Goth, Cosplay, et cetera--you've likely been affected by the Chinese invasion.

As a small business owner, I have mixed feelings about these changes in the online shopping industry.  Obviously, since part of my work is selling things online, I don't have a problem with e-commerce or free markets. I stock some items imported from China, India, and Pakistan--items that I wouldn't be able to offer if someone overseas weren't making them available at low prices.  I've also made personal purchases from direct-from-China stores and overall have had positive experiences with these transactions.

At the same time, it's worrisome to see the Chinese retailers creeping over into the Pagan category.  I see them marketing aggressively on Facebook and search engines.  I know that I can't compete with the very low prices--often below my wholesale prices for similar items--or offer free shipping.  I know that many customers mainly look at price and don't know or care where the product comes from.  And it's frustrating to see marketplaces that were formerly reserved for craftspeople (looking at you, Etsy) start to "go Chinese" with mass-produced goods.

I wrote this article after discussing these issues with a few other small shop owners.  I wanted to offer some encouragement, as well as some realistic advice, to fellow merchants and craftspeople facing the same challenges.  Chinese e-commerce is not going anywhere and the competition is getting tougher all the time.  We need to adapt.  But it is still possible to run a small business ethically and profitably.

Here is my assessment of the marketplace and some tips for keeping your niche business afloat:

Quality

You can't compete with China on price.  You just can't.  Even if they didn't have rock-bottom labor and manufacturing costs, the shipping alone would sink you.  Using the cheapest shipping method, it costs me about $2.50 to ship and track a one-ounce package within the US--or almost $7 internationally.  A high-volume Chinese seller pays less than 50 cents to ship the same tracked package almost anywhere in the world. (Which is why eBay is full of listings for $1 and $2 items with free shipping.)

What you can do is offer good-quality items and cater to customers who care about more than price.  Many imported things are made from cheap plastic, dubious metal alloys, and synthetic fibers.  Natural materials and fair-trade standards are nearly impossible to find.  Additionally, items that look nice in the sales photos are often pretty crummy in person, smaller than expected, or different than pictured or described.  Pay attention to quality, and your customers will have a reason to shop with you instead.

Variety

Shipping starts to get expensive fast once the package is above a few ounces in weight, even for Chinese sellers.  This is good news for American businesses.  It means that overseas retailers are limited to offering small, non-breakable items for direct sale---usually jewelry, accessories, and clothing.  Instead of going to war in these crowded categories, branch out into larger and heavier items. I don't think a Chinese e-store would be able to undercut me on candles, for instance, even if they could make them for next to nothing.

Also, Chinese shops tend to cluster around trends, with many vendors offering identical items until the trend changes.  Buyers want things they can't get everywhere, so keep your eyes open for unique stock.  Better yet, make inventory yourself!

Shipping Speed

Shipping from China is often free, but it's slow.  Often it takes a week or more to process an order, then another two to six weeks for it to arrive.  Direct-from-China just isn't an option for that last-minute gift or impulsive purchase.

Your customers' procrastination is your advantage!  Promise (and deliver) fast handling times, one or two days at most.  Offer expedited shipping options, too, so your customers can get their items on their timetable.

Web Presence

In the past, overseas sellers' listings were often riddled with eye-melting colors, awkward English, spammy keywords, and a lack of descriptive info.  Presentation is everything on the web.  As a niche retailer, you probably have a good idea of what kind of web content will appeal to your customers, so use it!  Small businesses have also had a head start at using social media to build a following and stay in touch with buyers.

Don't squander this advantage though, as the margins are slimming.  Product photography of Chinese products is generally quite good (if a bit sterile), and getting better all the time.  Often it mimics the vintage-y, crafts-y vibe of Etsy and Pinterest.  And overseas sellers are catching up on social media.  As they tune their marketing efforts to the kind of photos, copy, and web design that appeal to Western buyers, it's getting harder to tell if an online shop is located abroad or not.  Which bring us to...

Transparency

Enchantory is an e-store that sells Wiccan and Pagan-themed jewelry.  (I clicked through after seeing their relentess Facebook ads.) There's no business information or address on the page.  Only when I messaged them to ask specifically did they disclose that they ship from Singapore and Thailand.

It sucks to buy from this kind of site and then get hit with a foreign transaction fee on your credit card, or a surprise four-week shipping time--both of which have happened to me before.  You can stand out by providing real, concrete, and specific information about your business and products.

An empty page looks sleek, sure, but it also sets the bullshit detectors a-whirring.  Post a mailing address, phone number, or other contact info on your "about" page.  Use real humans to showcase your products instead of mannequins and creepy Photoshopped models.  If you're so inclined, throw in some pictures of your team members or work space, too.  Be upfront about your policies.  Describe your products accurately, including materials and dimensions.

Authenticity

Transparency lets people know where and who you are, authenticity makes them care.  We all prefer to give money people who are like us, or who we can relate to in some way.  Authenticity can come from a number of places: from making products yourself, knowing how best to use them, or genuinely wanting to provide the best possible experience for your customers.

If you're selling something that you actually like and care about, congratulations! You're on your first step to building authenticity, and miles ahead of all the trend-hopping opportunists online.

Customer Service

Service is another way to stand out from overseas sellers. I've found email customer service at these stores to be very prompt and friendly, almost effusively so. However, it's also quite impersonal and sounds scripted.  A lot of stores boast more items than they can support, so out-of-stock situations are frequent.  If there's a shipping problem (like a missing or broken item), long freight times make it impossible to get a replacement in a timely manner.

You can compete with China on service in a number of ways.  Keep track of your inventory to minimize disappointment.  Resolve customer issues quickly.  And use a personal voice (when appropriate) in your email communications, so customers know you're not a bot.

Local Involvement

This one is perhaps the most obvious, so I've saved it for last: It's impossible for overseas sellers to compete with you in person, in your own community.  Most people believe in shopping locally, even though we don't always do it in practice.

If you have a brick-and-mortar store, hopefully you also have the type of customer base who will pay a premium to keep your doors open.  Even if you don't, you can have a local presence by vending at events and fairs.  Teach, learn, network, revel, and help build the local business community that you want to be a part of!

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